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Blueacorn

Lender or loan platform

PPP
Type
Company or group
Role
Lender or loan platform
Programs
PPP
Updated

The profile

Individuals and companies whose conduct was challenged or called into question during or after the pandemic. See sources: House fintech report, Dec. 1, 2022 Clyburn letter, Nov. 22, 2021 Banking Dive on SBA review, Dec. 9, 2022

  • Type: PPP lender service provider (LSP) / agent, not a lender of record.
  • Legal entities: Fin Cap, Inc.; BA Fin Orion, LLC d/b/a Blueacorn (a/k/a Fin Orion LLC); Blue Acorn PPP, LLC / Blueacorn PPP, LLC. Multiple entities were used to "do business as Blueacorn" across 2020–2021, per Nathan Reis's plea papers and the Delaware litigation captions. Blueacorn's site footers read "FinCap, Inc an Wyoming Corporation / Blue Acorn PPP, LLC a Delaware LLC" in 2021 and "Blueacorn PPP, LLC a Arizona LLC / FinCap, Inc an Wyoming Corporation" in December 2022; its lawyers told the Select Subcommittee that Blueacorn signed the Prestamos agreement "through its wholly-owned subsidiary, BA PPP Fin, LLC."
  • Founded: April 2020, Scottsdale/Phoenix, Arizona; incorporated the same month the Paycheck Protection Program launched, and specifically to facilitate PPP loans.
  • HQ: 7014 E Camelback Rd, Suite 1452, Scottsdale, AZ 85251 (the address on the May 2020 launch homepage).
  • CEO: Nathan Reis (founder, 2020 – ~March 2021); Barry Calhoun (outside CEO, March 2021 – wind-down).
  • Role: Collected and screened PPP applications through a borrower-facing wizard at blueacorn.co, routed approved files to partner CDFI lenders of record (Prestamos in Phoenix; Capital Plus Financial in Bedford, Texas), and took a share of the lenders' SBA processing fees. Blueacorn's own 2021 self-description: "Is Blueacorn a bank? No. We're a Lender Service Provider."

In the archive

Pandemic-role map

  • Reader shorthand: PPP-only lender-service provider / agent, not a lender.
  • What Blueacorn did for borrowers: created an online application funnel aimed at sole proprietors, gig workers, and other small borrowers who needed help obtaining PPP loans.
  • What Blueacorn sold to other companies: sold application intake, document collection, KYC/fraud-tool orchestration, human review capacity, and borrower volume to CDFI lenders of record, chiefly Prestamos and Capital Plus.
  • Who else was in the stack: Paynerd generated leads; Elev8 Advisors and Business Warrior supplied eligibility-review labor; Plaid, GIACT, Onfido, and IDology supplied parts of the automated identity/bank-account stack.
  • Where responsibility sat: Prestamos and Capital Plus were the SBA lenders of record; Blueacorn controlled the borrower-facing portal and review workflow and was paid from lender processing-fee splits.

Before the pandemic (pre-March 2020)

Blueacorn did not exist before the CARES Act.

The three operating founders: Nathan Reis, who went by "Nate," was an account executive at Lehman Brothers, selling subprime derivatives, until July 2006, then ran a string of small Arizona ventures (Juuice Inc., Juuice LLC, Body Politix) through the 2010s. The House Select Subcommittee report described him as a "cell phone accessory merchant and former Lehman Brothers subprime derivative salesman." Stephanie Hockridge (Reis's wife, who also used the married name Stephanie Reis) was an Emmy-nominated television news anchor at ABC15 (KNXV-TV) in Phoenix from 2011 to 2018. Noah Spirakus had a technology background: co-founder and CTO of Bold Financial Technologies (acquired by Airbnb); co-founder and CEO of Prospectify (acquired by AngelList); engineering roles thereafter.

The fourth founder, James "Jimmy" Flores, appears in the public record through Blueacorn and an affiliated consultancy, Qualytics.

During the pandemic (April 2020 – May 31, 2021)

Launch (April–August 2020)

Reis and Hockridge incorporated Blueacorn in April 2020 in Scottsdale. On its May 6, 2020 homepage, the site pitched itself as a free "application wizard" that fills out PPP paperwork, "automatically assembles your loan & sends it to the bank ready for funding, fast." The fee model was the one PPP rules permitted for agents: paid by the lender on funding, with the explicit promise that "we don't get paid, if you don't get funded." The single named lending partner on that launch page was Prestamos, the CDFI lending arm of Chicanos Por La Causa, the Phoenix Hispanic-community nonprofit.

The records describe Blueacorn's 2020 role differently, and none of them counts the loans Blueacorn handled that year. The indictment of Reis and Hockridge says that in 2020 they "submitted and facilitated the submission of PPP loan applications through various lenders." In the Select Subcommittee's Blueacorn documents, Blueacorn's lawyers say in a letter of December 23, 2021 that it had "only been involved in processing PPP loans since January 2021," and Prestamos says it made its 925 PPP loans of 2020 through its pre-existing SBA lending platform, before it signed a lender service provider agreement with Blueacorn on April 14, 2021. The SBA PPP FOIA loan-level release also records 925 Prestamos loans approved in 2020, $26.6 million in all, and none from Capital Plus that year.

According to Reis's factual resume (ECF 272, Aug. 6, 2025), in April 2020, before Blueacorn's public launch, Reis obtained a fraudulent PPP loan of approximately $69,870 for Juuice Inc. using fabricated tax documents that falsely claimed Juuice paid employees including himself and Hockridge. The factual resume catalogs a sequence of further insider loans through 2020 and into 2021, using the same template and the same Blueacorn-adjacent infrastructure: Juuice LLC, Body Politix (twice), and loans tied to co-conspirators James Flores (July 2020) and Vivian Arriaga.

What the customer was sold, and who paid for it

Blueacorn charged borrowers nothing and collected more than $1.08 billion from its lenders in 2021. The money came from the PPP fee rule. SBA paid the lender a processing fee on each loan, and an agent could be paid only out of that fee; agents were barred from charging applicants. The lenders gave Blueacorn "up to 70 percent" of theirs. The launch homepage of May 6, 2020 described the arrangement this way: "Our service is 100% FREE because The CARES Act mandates banks pay us a fee, if they approve your loan." A later partners page said the CARES Act "mandates the SBA pay a fee which gets split between Blueacorn and the lending bank."

The fee rule changed on December 27, 2020. For loans of $50,000 or less the lender's fee went from 5 percent of the loan to the lesser of 50 percent or $2,500. A $5,000 loan now paid the lender $2,500. Blueacorn signed its Capital Plus agreement in January 2021, and its lawyers told the House Select Subcommittee it had "only been involved in processing PPP loans since January 2021." Its FAQ that March explained why few rivals served small borrowers: "Because it's not as profitable to help smaller businesses."

The pitch was that the loan would cost the borrower nothing. A May 12, 2020 post on Blueacorn's blog asked, "Is a PPP Loan basically free money?" and answered, "Essentially, Yes!" Stephanie Hockridge called the program "$100 billion dollars of free money" in a promotional appearance, and Facebook ads called the loans "100% forgivable," according to the Subcommittee.

The company described its team as volunteers. Its About page in February 2021 was headed "Meet Our Volunteers" and said "an experienced group of entrepreneurs" had "joined forces and volunteered to build a platform focused on giving underserved businesses free and fair access to PPP funding." The volunteers listed included Jimmy Flores, Michael Cota and Vivian Arriaga, whose convictions are covered below. In March 2021 the FAQ said the phone line had "been set to a voice recording" because the team worked remotely during the pandemic. The Subcommittee gave Hockridge's title as "Customer Service Lead" and found that 0.75 percent of Blueacorn's income went to customer service and support. At the peak, Blueacorn told ProPublica, 300 people in the Phoenix area were reviewing applications.

Some approved loans were paid onto prepaid cards from Dash. For loans where a bank had raised questions, Prestamos told the Subcommittee, the cards were used 13,343 times, "authorized by Blueacorn and provided by Dash." Blueacorn's card FAQ said it "has covered the fees associated with card issuance." ATM withdrawals cost $3 plus the ATM operator's fees and were capped at $1,000 in any 24-hour period; payroll could be paid by transfer or ATM withdrawal, where "Fees may apply." ProPublica reported that the card route required more documentation and produced "an outpouring of angry posts."

By June 4, 2021 the homepage had stopped taking applications and claimed "over 500,000 Self-Employed People" and "Over $8 Billion in PPP Loans." Five days later a press release put the total at "approximately $14 billion" for "more than 860,000 small businesses, approximately 80% of which are minority owned," and promised a forgiveness portal "in the coming weeks." The portal was open by December 2021. In December 2022 the homepage gave 808,000 businesses and $12.5 billion. Prestamos's own count for its channel was about 439,622 loans funded through the Blueacorn platform out of about 551,153 applications sent to SBA in Round 3.

Blueacorn's press page carried one release in June 2021 and "No Posts" in December 2022; neither version mentions layoffs. Between June and November 2022 its blog published 34 general small-business posts. On December 16, 2022, eight days after SBA suspended the company, the homepage told borrowers to file forgiveness applications with SBA. The FAQ that month said Blueacorn had "successfully facilitated tens of thousands of dollars in PPP loans."

The Capital Plus partnership and the 2021 surge (January – May 2021)

On January 11, 2021, the day PPP's third round opened, Crossroads Systems' CDFI subsidiary Capital Plus Financial announced a partnership with Blueacorn. Capital Plus described the joint product as "an easy-to-use application wizard" with the borrower portal at blueacorn.co. On the April 11, 2021 homepage, Capital Plus was the named lender, and the page targeted "PPP Loans for Self-Employed and 1099s."

Two rule changes preceded the 2021 volume. First, on March 3, 2021, SBA issued the interim final rule letting Schedule C sole proprietors size PPP loans on gross income rather than net. Second, the Biden administration's CDFI priority window let CDFIs (Prestamos and Capital Plus among them) keep originating PPP loans through the program's May 31, 2021 close.

Per the House Select Subcommittee report, Blueacorn told the Subcommittee that in 2021 it supported approximately 808,000 small business owners or sole proprietors through $12.5 billion in PPP funds, with more than 1.7 million applicants completing initial screening and 739,282 approved applications sent to lenders for funding. Blueacorn's own June 9, 2021 press release with Prestamos and Capital Plus claimed roughly $14 billion processed and more than 860,000 small businesses helped. The Subcommittee report, citing SBA's PPP report, says Capital Plus and Prestamos issued 472,036 and 494,415 PPP loans in 2021, for a total of $15,258,132,373. Capital Plus's 2021 lending: 472,036 loans averaging $16,062, roughly $7.6 billion.

The fee economics: Blueacorn collected approximately $1.08 billion in agent fees across the two CDFI partners: more than $700 million from Prestamos and more than $385 million from Capital Plus. Capital Plus's parent Crossroads Systems went from $3.65 million net income in fiscal 2020 to $195.4 million in fiscal 2021, per its filings.

Management transition

In March 2021, the same month as the sole-proprietor rule change, Blueacorn installed Barry Calhoun as outside CEO. Calhoun came in from finance and corporate turnarounds: Bayard Business Capital, Larson Capital Management, senior wealth-management roles at Bank of America and U.S. Bank. He later described what he inherited as "a fly-by-seat-of-the-pants sort of environment." Reis's own sworn factual resume stipulates that "beginning in or around March 2021, Reis was not involved in active participation in the corporate operations of Blueacorn"; the same document states he "remained in the conspiracy through in or around May 2021."

By November 22, 2021, when Select Subcommittee Chairman James Clyburn opened a congressional inquiry into Blueacorn's practices, the addressee was "Mr. Barry Calhoun, Chief Executive Officer, Blue Acorn PPP, LLC."

How the operation ran

Blueacorn marketed its tooling as "high-quality, proprietary lending software and fraud detection tools." Documents the Subcommittee obtained describe a different stack: four off-the-shelf KYC subscriptions — Plaid (bank-account connection), Giact (bank/identity verification), Onfido (document-and-biometric identity), and IDology (knowledge-based identity quizzes). For its Capital Plus channel, the back-end loan-processing and SBA-submission system was a third-party platform run by Womply, which Blueacorn paid for access.

Human eligibility review was outsourced to Elev8 Advisors, a small Arizona consultancy run by Adam and Kristen Spencer, engaged in January 2021 as "compliance consultant and marketing partner," and to a supplemental vendor, Business Warrior. Internal communications quoted in the Subcommittee report describe Kristen Spencer telling reviewers "the faster the better," that reviews "should take you less than 30 seconds," and a Slack message in which COO Matt Yahes instructed her to "do nothing outside of making sure [eligibility reviewers] get through 5000 files a day"; Blueacorn's IT consultant replied, "oy vey, that's a lot haha." Elev8's own August 2021 PPP forgiveness application reported a single employee.

Per the Subcommittee report, at the end of March 2021, Blueacorn was using IDology's knowledge-based quizzes, which flagged "a large number" of applications as suspicious. In early April 2021, as round-three volume and per-loan fees peaked, Blueacorn demoted IDology and made Onfido its primary identity verification, routing applicants to the stricter check only if they failed the easier one.

Where the $1.08 billion went (Blueacorn's own Simplified Cash-Flow Statement, Bates BA-SSCC-0000121-22)

Produced under subpoena to the Select Subcommittee, characterized in the report and Figure 2:

  • $666 million of the $1.08 billion → Paynerd (Pay Nerd LLC / Paynerdier LLC), the marketing and lead-generation firm co-owned by Blueacorn Strategic Advisor Matt Mandell and CMO Taylor Hendricksen.
  • $258 million → owners as profits; the report puts owner profits at approximately 24 percent of Blueacorn's total income in 2021. The Blueacorn operating agreement the Subcommittee obtained showed Spirakus owning 50% and Reis-Hockridge jointly owning the other 50%, a stake the report said "could have entitled Mr. Spirakus to $129 million, while Mr. Reis and Ms. Hockridge would have shared the other half." (Blueacorn declined to give the Subcommittee profit information broken out by individual owner.)
  • $51,597,240 (4.75 percent) → technology.
  • $13,713,563 (1.26 percent) → eligibility verification.
  • $8,682,207 (0.79 percent) → fraud prevention.

The cash-flow figures are from Blueacorn's own statement as produced to the Subcommittee; the line items have not been independently audited.

VIPPP

The Subcommittee described a special category of applications — "VIPPP," for "Very Important PPP" — managed by Hockridge outside the standard workflow, in which large or relationship loans got faster handling and less scrutiny. DOJ's November 2025 sentencing release goes further, describing the trial evidence: Hockridge and others offered VIPPP to help borrowers complete PPP applications; Hockridge recruited co-conspirators to work as VIPPP referral agents and coach borrowers on how to submit false applications; and she and her co-conspirators fabricated payroll records, tax documentation and bank statements and charged borrowers kickbacks based on a percentage of the funds received.

Flores testified at Hockridge's June 2025 trial.

Coverage and oversight, late 2021

On November 22, 2021 Chairman Clyburn sent the Subcommittee's oversight letter to Calhoun. The November 24, 2021 Banking Dive headline — "Blueacorn, Womply added to House PPP probe" — reported the inquiry. ABC15 in Phoenix, where Hockridge had worked, ran a December 17, 2021 follow-up.

After the pandemic (June 2021 – present)

The December 2022 report and the SBA suspension

On December 1, 2022, the House Select Subcommittee on the Coronavirus Crisis released "We Are Not the Fraud Police: How Fintechs Facilitated Fraud in the Paycheck Protection Program." Blueacorn and Womply were two of its case studies. Seven days later, on December 8, 2022, SBA said it had suspended Blueacorn and Womply, both non-lenders, from working with the agency "in any capacity" (SBA statement, Dec. 8, 2022) and opened investigations into eight partner lenders, including Capital Plus, Prestamos, Cross River, Celtic, Customers, Fountainhead, Harvest, and Benworth.

Civil litigation

  • OTO Analytics (Womply) v. Capital Plus Financial, Crossroads Systems, Eric Donnelly, BA Fin Orion LLC d/b/a Blueacorn, and Barry Calhoun, No. 3:21-cv-02636-B (N.D. Tex.): Womply sued for fees it put at $76,714,482.67. The court dismissed the claims against Blueacorn and Calhoun without prejudice for lack of personal jurisdiction on April 11, 2022 (Doc. 68). The dismissal was jurisdictional, not a merits ruling.
  • Fin Cap Inc. v. PayNerd LLC, Paynerdier LLC, Matthew Mandell and Taylor Hendricksen, Del. Super. C.A. N21C-12-118 MMJ CCLD: Blueacorn's parent sued its own marketing partner in December 2021 alleging fraudulent inducement, negligent misrepresentation, fraud, unjust enrichment, promissory estoppel, and an Arizona Consumer Fraud Act violation.
  • Blueacorn PPP, LLC v. Pay Nerd LLC, et al., Del. Ch. C.A. 2023-0414-MMJ (opinion Jan. 29, 2024, unsealed Feb. 8, 2024): the Chancery Court denied Paynerd's motion to dismiss and found Paynerd had adequately pleaded fraudulent-inducement counterclaims against Blueacorn and against Nate Reis personally.

The criminal cases

The prosecutions were brought in the Northern District of Texas, Fort Worth Division.

United States v. Reis & Hockridge, 4:24-CR-287-O, before Chief Judge Reed O'Connor:

  • Indictment filed under seal November 14, 2024, unsealed by order of November 21, 2024. Superseding indictment May 8, 2025 (ECF 163). One count of conspiracy to commit wire fraud (18 U.S.C. § 1349) and four counts of wire fraud (18 U.S.C. § 1343).
  • June 20, 2025, Hockridge jury verdict (ECF 223): guilty on Count 1 (conspiracy), acquitted on Counts 2–5 (substantive wire fraud).
  • August 6, 2025: Reis plea agreement and factual resume (ECF 272–273); guilty plea August 11, 2025. Pleaded to Count 1 (conspiracy).
  • November 21, 2025, Hockridge sentenced (ECF 362): 120 months, two years supervised release, $63,952,063.64 restitution to SBA. Joint and several with Reis and Flores. No fine. Notice of appeal December 5, 2025.
  • December 18, 2025, Reis sentenced (ECF 390): 120 months, two years supervised release, $66,038,049.27 restitution to SBA. Mostly joint and several. No fine. Notice of appeal December 29, 2025.
  • DOJ's summary at Reis's sentencing: Reis and co-conspirators processed more than 530 fraudulent loans causing more than $65 million in losses. Hockridge's release used the $63 million figure for the fraudulent PPP loans tied to the conspiracy.

United States v. James Flores, 4:24-CR-306-Y, before Judge Terry R. Means:

  • One-count felony information December 5, 2024; waiver and guilty plea December 11, 2024 to conspiracy to commit wire fraud.
  • September 17, 2025: sentenced to 41 months, three years supervised release. Restitution under the amended judgment of September 25, 2025: $64,391,256.84 joint-and-several with Reis and Hockridge (corrected from $64,844,573.00 in the original judgment), plus j/s amounts of $45,617.75 with Arriaga and $83,929.49 with Cota. Surrender by October 13, 2025.

Affiliated convictions: Michael Cota (3 years probation; $1,844,410.40 restitution); Vivian Arriaga (3 years probation).

Asset recovery

Reis transferred roughly $46 million into Nevada trusts (Mint Legacy Trust and Mint Family Trust) in 2022; Hockridge transferred roughly $29 million into similar Nevada trusts (Marietta Legacy Trust and Marietta Family Trust). In April 2026 Judge O'Connor found those trusts subject to garnishment as nominee arrangements. On May 19, 2026 DOJ-NDTX announced it expected to recover nearly $30 million through enforcement against the Reis and Hockridge trusts.

The court ordered Reis to surrender by January 20, 2026, with a recommendation for FCI Bastrop, and Hockridge by December 30, 2025, with a recommendation for FPC Bryan, Texas; a December 26, 2025 order extended Hockridge's surrender date to January 30, 2026, and a later order, reported by ABC15 in July 2026, moved it to December 1, 2026 while her lawyers sought her release pending appeal (ABC15, "Hockridge prison sentence delayed again until December," https://www.abc15.com/news/local-news/hockridge-to-remain-out-of-prison-until-june). In the garnishment proceeding both defendants asserted that they reside in the District of Puerto Rico (Doc. 429, Feb. 10, 2026).

Who wasn't charged

  • Noah Spirakus: 50% owner, CTO. Not charged. Currently a Techstars mentor and investor associated with Everywhere Ventures and the New Technical Fund, based in Gilbert, Arizona.
  • Barry Calhoun: CEO from March 2021; addressee of the Subcommittee's November 2021 letter. Not charged. Now Co-Managing Partner of BLSQ Management, a firm working with mid-sized financial institutions and non-bank small-business lenders.
  • Matt Yahes: COO; author of the "5000 files a day" Slack message quoted in the Subcommittee report. Not charged. Post-Blueacorn whereabouts not publicly documented.
  • Adam and Kristen Spencer (Elev8 Advisors): named in the Subcommittee report's passages on reviewer instructions and on their own PPP loans. The report recommended that SBA's inspector general investigate the loans awarded to the Spencers and their family members and "refer them to law enforcement if appropriate" (House report, Dec. 1, 2022). Not charged as of mid-2026.
  • Matt Mandell and Taylor Hendricksen (Paynerd): co-owners of the firm that received the ~$666 million marketing line. Not charged.

The company itself

Blueacorn the company (Fin Cap Inc., BA Fin Orion LLC, Blue Acorn PPP LLC) was never criminally charged. No civil fraud judgment or False Claims Act settlement has been entered against it. SBA suspended it in December 2022. The corporate shells continue to exist as litigation parties (the Delaware Paynerd cases remained active into 2025), but Blueacorn has had no operating business since PPP closed to applicants on May 31, 2021.

Current posture (as of mid-2026)

Reis is in custody, Hockridge is appealing to the Fifth Circuit with a December 1, 2026 surrender date, Flores is serving 41 months, and the Nevada trusts are being garnished. The company never operated outside PPP and does not operate today. Capital Plus and Crossroads Systems remain SBA-investigation subjects but have not been charged; Prestamos and Chicanos Por La Causa remain operating as a CDFI and nonprofit respectively. Paynerd and Elev8 principals remain uncharged.

Sources

Primary documents in this archive

External references

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